A method of modeling polarization by representing an atomic‐centered induced dipole as a set of induced charges on the atom and its immediate neighbors is presented. The method is based on earlier work on deriving atomic charges from a distributed multipole analysis (P. J. Winn et al., J Phys Chem A 1997, 101, 5437; G. G. Ferenczy, J Comput Chem 1991, 12, 913). The method has been applied to the water dimer, water trimers, formaldehyde–water complexes, methanol complexes, and DNA basepairs. It was found that the induced charges described the various cooperative and anticooperative hydrogen bonding systems well, both qualitatively and quantitatively (as compared with Hartree–Fock calculations). Importantly, it has been shown that, when an induced charge (or induced dipole) model is used for larger molecules, a correction term is required for the underlying electrostatics. ©1999 John Wiley & Sons, Inc. J Comput Chem 20: 704–712, 1999